The
Definition Of

Par value stock

Par value stock is capital stock to which the charter has assigned a value per share. Years ago, par value determined the legal capital per share that a company must retain in the business for the protection of corporate creditors; that amount was not available for withdrawal by stockholders. Thus, in the past, most states required the corporation to sell its shares at a par or above.

Share it:

More from this Section

  • Parent company & Subsidiary (affiliated) company
    A company that owns more than 50% of the common stock of another entity is known as the patent company. The entity whose stock the parent company...
  • Inventory Systems
    A merchandising company keeps track of its inventory to determine what is available for sales and what has been sold. Companies use one of two systems to account for inventory...
  • Secured bonds
    Secured bonds have specific assets of the issuer pledged as collateral for the bonds. A bond secured by real estate...
  • Advantages of Subsidiary Ledgers
    Subsidiary ledgers have several advantages: They show in a single account transactions affecting one customer or one creditor, thus providing up-to-date...
  • Direct materials budget
    The direct materials budget shows both the quantity and cost of direct materials to be purchased. The quantities of direct materials are derived from the following formula.
  • Flexible budget
    Flexible budget is a projection of budget data for various levels of activity. In essence, the flexible budget is a series of static budgets at different levels of activity.
  • Internal check
    Internal check is a method of organizing the accounts system of a business concern or factory where the duties of different clerks are